I am interested in learning how to invest on a small scale from the ground up,to start off with. If anyone can give me some good pointers it would be appreciated. Thanks, for your help before hand. Martha

a) Broad U.S. Stock Index fund, like Vanguard Total Stock Market Index.
b) Broad International Stock Index fund, like Vanguard Total International Index Fund.
c) Broad bond fund. This is where it gets tricky. Lots of different opinions here.

i. I prefer corporate bonds because I think government bonds have substantial quality downgrade risks.
ii. Most people would recommend an intermediate term bond fund.
iii. I don’t like even intermediate bond funds because I think interest rate increases are likely, so I am keeping my bond funds short.

Read a lot. When I first started, I subscribed to Money Magazine, which gave a lot of the basics of investing. I’m not sure that’s the one to take now, but I’m sure others here can suggest one that won’t cost an arm & a leg.

I’d certainly be very careful, as the economic situation is uncertain with many forecasting a collapse. Might want to just build a large cash reserve until we’re sure Obama is out of office.

There is no simple (or non-smartass) answer to your question. It depends in large measure upon your objective (your financial goal), your risk tolerance, your investment time horizon (how long until your goal is to be achieved?), your current financial resources (assets), and your existing obligations (liabilities), as well as the nature and duration of both.

If I were you, I would consider my answers to all of the above and then seek the advice of a financial planner who charges for his or her services based upon assets under management, and who therefore encourages a long-term, flexible strategy to meet your changing needs.

12
posted on 05/01/2012 1:08:50 PM PDT
by andy58-in-nh
(America does not need to be organized: it needs to be liberated.)

Good info.....but I will narrow it down, I want to dabble in this, do I need a stockbroker. I have a 401K plan but that is not one I can decide how to invest. I have other things I want to try, but this is totally new to me. Thanks, for your time and help.

Your bank probably provides investment services though they may have slightly higher fees. Ask them about opening a brokerage account and pick their brains on what investments you can avail through them. You can then buy online or through their brokers. Initially you will only want a “cash” account! NO MARGINS! You will be told to use leverage (loans) to grow your portfolio, NOT FOR NEWBIES! Stay safe by buying dividend paying stocks or corporate bonds until you have learned A LOT more. Research any company you wish to consider owning. Smaller companies carry more risk but could offer higher growth. Look at their balance sheets thoroughly for cash flow/debt. Look at insider trades. Look at institutional ownership. Way out of your league now but look to see if they have a large short-sale ratio. If you hold a stock for a year the proceeds are taxed differently from trading shares. There is so much you don't know at this point, keep it simple! Take profits when possible! You'll never go broke taking profits!

18
posted on 05/01/2012 1:34:51 PM PDT
by outofsalt
("If History teaches us anything it's that history rarely teaches us anything")

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